。
She was playing the piano at the time.
Literal
She [topic-は] that-time piano [object-を] was-playing.
A simple past progressive sentence anchored by その時. 弾く ('play [string instrument]') is the standard verb for piano, guitar, violin — anything plucked or struck. Different verbs go with different instrument families: 吹く ('blow') for winds, 叩く ('strike') for drums, 鳴らす ('sound') for general 'making noise.' ピアノ is a katakana loanword from Italian (via English), like much Japanese musical vocabulary. The past progressive ~ていた frames the playing as ongoing at the past reference point — typical setup for a 'meanwhile, she was...' kind of narrative beat.